Mr. Speaker, while friends of the Liberals are making a killing under a system that allows them to get contracts before calls for tenders are even issued and that provides a double billing mechanism, the Liberal government is incapable of ensuring day to day administration.

It is dragging its feet regarding the announcement of investments for highway 185. It is letting Les Escoumins pier go into disrepair, even though it owns it, thus jeopardizing the ferry season, the jobs of 26 workers and the whole tourism industry in the area. Moreover, the government is abandoning the provinces, which are the victims of a fiscal imbalance that is choking them.

It is high time that the federal government set up an independent public inquiry to shed light on the whole system that led to the sponsorship scandal, and started to take its responsibilities again.

The Prime Minister must put an end to the shenanigans, even though he initiated them.

Mr. Speaker, we have more questions on these contract scandals. We now know that the Prime Minister was aware of the sponsorship scams in September 2000.

This is what the Prime Minister did. He had his most senior officials huddle for a damage control session. Then the internal audit was sanitized and published without the names of the offending companies. Since that time tax dollars have kept flowing to these Liberal firms.

Mr. Speaker, in fact the internal audit was posted on the Internet on October 11, 2000. The only changes that were made were those required by the Access to Information Act and the privacy legislation. Otherwise there were no material differences whatsoever.

Media reports began to appear the very next day, October 12, 2000, as evidenced on page 3 of the Globe and Mail . Obviously this was not a secret operation.

Even before the meeting in the Prime Minister's office, government authorities summoned officials from the five large firms to attend a meeting: Boulay, Brault, Coffin, Gosselin and so on.

The financial audit was released without names and, since then, millions of dollars in contracts have been paid, with taxpayers' money, to these Liberal companies. Is this how the government thinks Canadians' money should be used?

Mr. Speaker, indeed immediately upon the completion of the internal audit, which again I would say the auditor general has described as excellent, courageous and a critical piece of work, an action plan was developed in order to correct what the audit had revealed. That action plan was implemented over the course of the following 12 to 15 months. There was a review conducted in the spring of this year to verify that in fact the corrective action had been taken.

Mr. Speaker, it was an action plan that led to nothing other than the companies getting more money.

Here is a specific example of what I am talking about. First, last week the Minister of Public Works and Government Services claimed it was natural justice for the government to continue to do business with Groupaction. Then after pressure he told us he would essentially not approve any more business. Today what do we learn? We now learn that there have already been back channels set up for more contracts with Groupaction through other departments.

How far is the government going to go to keep taxpayer money flowing to its friends?

Mr. Speaker, let me be very clear about the action that was taken last week.

Where my department is the contracting agent on behalf of either itself or any other department or agency of government, new advertising business to Groupaction will not be entertained. Whenever there is business caught in process by this decision, it will be reviewed on a case by case basis. My department is contacting every other agency of the Government of Canada to draw this position to their attention.

Mr. Speaker, the one thing in that answer you will notice is that between 2000 and now, nothing happened, zero.

The Prime Minister sent his personal advisors to this meeting. They knew what was happening and they had a choice. They could have chosen to clean it up or cover it up. Why did the Prime Minister and the Liberal government choose to cover up the sleaze in public works?

Mr. Speaker, since the internal audit was posted on the Internet on October 11, 2000 it is hardly a cover-up. The matter in fact was public in the Globe and Mail on page 3 the very next day, Thursday, October 12. This was obviously not a covert operation.

Mr. Speaker, the minister and officials at the time undertook an action plan that was intended to address the deficiencies that had been found in the internal audit. The action plan was prepared and the implementation began in the early part of 2001. Through the following 12 to 15 months the action plan was implemented. There was a further review by the internal auditor this spring to confirm that the necessary corrective action had in fact been taken.

Mr. Speaker, the Prime Minister knew as early as September 2000 that the sponsorship program had been used for a gross abuse of tax dollars. However, because he was in a hurry to call a general election, the Prime Minister preferred to keep quiet about the whole thing.

The most influential members of his cabinet even prepared a comprehensive communications strategy, in case the Prime Minister would be asked about this most damning scandal for the government.

Will the Deputy Prime Minister admit that the strategy devised on September 28, 2000 by the Prime Minister's closest advisors has all the makings of a cover-up operation prepared on the very eve of an election campaign?

Mr. Speaker, I do not know how it could be a camouflage operation when the internal audit was posted on the Internet, when it appeared in newspapers the very next day and when every ATIP request since has been responded to.

Mr. Speaker, this cover-up operation included, among other measures, having the ethics counsellor testify, since he was a mere puppet of the Prime Minister during the election campaign.

In the fall of 2000, the Deputy Prime Minister not only decided to hide the scope of the irregularities condemned in the public works report, he even gave his blessing to the continuation of an operation which he knew was quite improper.

Will the Deputy Prime Minister recognize that because of his determination to protect his government on the eve of the election, to this day the sponsorship program continues to lead to the worst possible abuse, so much so that the minister of public works says that it is indefensible?

Mr. Speaker, as I have indicated, as the Prime Minister has indicated and as the Deputy Prime Minister has indicated, the errors and mistakes of the past cannot be condoned. We do not condone them. We make no effort to defend the indefensible. We think mistakes were made. We are determined to correct those mistakes in future, including finding an alternate delivery mechanism that does not use external agencies.

Mr. Speaker, the Prime Minister was fully informed about the numerous irregularities in the Public Works Canada sponsorship program. Instead of putting an end to it, his strategy was to acquire a communications plan for damage control in case this got out, and as a result, millions of dollars worth of contacts were awarded subsequently without the government doing anything to stop it.

My question is for the Prime Minister. Is there not something basically immoral about withdrawing a question of such seriousness from public debate just before a general election?

Mr. Speaker, again, it was hardly withdrawn from public debate. It was posted on the Internet. It was published in the Globe and Mail. ATIP responses have been made to the requests that have followed. I have a mandate from the Prime Minister to find out where the errors happened, to correct them, and to make sure they never happen again.

Mr. Speaker, in his attempt to defend the indefensible, the minister of public works is using an argument that does not hold water. Putting the report on the Internet, with the names obliterated along with half the information, is of no importance. The fact is, the situation continued despite the PM's knowledge of it.

Will the Deputy Prime Minister admit that the PM's strategy, after he learned about the situation in 2000, was not to settle the problem but to conceal things and protect his buddies? This is what he is being faulted for.

Mr. Speaker, the changes that were made in terms of the deletion of information that appeared on the Internet were those changes that are in fact required by the laws of this House having to do with access to information and the privacy legislation. Otherwise there was no material change. Publishing on the Internet is hardly keeping it secret.

Mr. Speaker, I know the Prime Minister has been busy these days fighting off mutinies and scandals, but it is about time he paid attention to issues of daily survival not of himself but of Canadians facing poverty.

Today the Canadian Association of Food Banks released a scathing report showing that twice as many people need food banks today compared to in 1989. How does the Prime Minister reconcile his support for ending world hunger at the Rome summit while here at home three million Canadians are victims of his government's legislated poverty?

Mr. Speaker, certainly the incidence of poverty in Canada is something that all of us deplore and against which we need to continue to make efforts.

It is also important to recognize that the number of Canadians with low incomes continues to decline. It has declined from 14% in 1996 to 11.8% in 1999. The number of jobs has increased. Over the first five months of this year 237,000 jobs have been created. That is going to make a major contribution to reducing the number of people living in poverty.

Mr. Speaker, we have heard the same mantra before. If these figures are correct, why is it that child poverty has doubled in this country since the resolution was passed by the House in 1989? Why has food bank usage gone up so much?

The same report from the food bank association specifically exposes government policies like EI cuts that have driven families into poverty.

I ask again, where is the evidence that the government's actions have reduced poverty rather than increased it?

Mr. Speaker, to deny the progress that has been made, to fail to recognize the important contribution that has occurred to alleviate poverty in Canada through the child tax credit, other directed tax measures, support for housing, support for homelessness and the fact that we have made real progress in creating employment in this country, why put Canadians against a plan to try to alleviate poverty elsewhere in the world? This is a project which all of us need to identify with.

Mr. Speaker, clearly when prominent Liberals are awarded millions in contracts, who benefits is the Liberal Party, not Canadian taxpayers.

On Friday I asked the auditor general to investigate a $17 million sweetheart deal awarded to Tim Banks, the solicitor general's close friend and fundraiser. No one questions the project's merits or island investment, but one does question the partisan process and the dodging of detail.

Will the government simply table all the documents, including the list of bidders, and will it support a call for a full forensic audit on the Greenwich deal?